CIMB calls off plan to buy RBS India assets, cites legal issue

"The termination of the proposed sale of the India Business is due to an unexpected legal issue arising in connection with the sale of the India business by RBS," CIMB Group said in a filing to the Malaysian stock exchange.

In April this year, CIMB had announced it would buy most of the Asia Pacific cash equities and associated investment banking businesses of RBS in India, Australia, China, Hong Kong, Indonesia, Malaysia, Singapore, Taiwan and Thailand.

"... RBS is excluding the sale of the cash equities, equity capital markets and M&A corporate finance business in India from the sale and purchase agreement entered into between CIMB Group and RBS on April 2," the filing said.

CIMB Group Chief Executive Nazir Razak said it remains committed to having an Indian component to the Asia Pacific investment banking platform.

"We see this as a temporary delay in our Indian build up as we will now have to follow the same process as Korea, which was excluded from the RBS transaction from the outset, and proceed to establish our own operation by applying for a new licence or purchasing an entity with an existing licence," Razak noted.

According to the Malaysian entity, the proposed acquisition involving China and Hong Kong as well as Indonesia, Malaysia, Singapore and Thailand have been completed.

The balance involving Australia and Taiwan is on schedule for completion in the fourth quarter of 2012, it added.

Without the Indian portion, the total acquisition cost would come down to 781 million Malaysian ringgit (over Rs 1,368 crore). Including India assets, the overall deal would have been worth 849.4 million ringgit.

CIMB offers consumer, investment and Islamic banking, among others.